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Virtu Financial (VIRT) Q2 Earnings Beat on Strong Market Making
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Virtu Financial, Inc. (VIRT - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 83 cents, which outpaced the Zacks Consensus Estimate by 33.9%. The bottom line jumped from 37 cents per share a year ago.
Adjusted net trading income improved more than 36% year over year to $385.1 million in the quarter under review. It beat the consensus estimate by 15.8%.
The strong second-quarter results benefited on the back of strong revenue contribution from the Market Making segment and higher revenues from commissions. However, the upside was partly offset by an elevated overall expense level.
Virtu Financial, Inc. Price, Consensus and EPS Surprise
Revenues from commissions, net and technology services amounted to $126.1 million, which rose from $109.5 million a year ago. The metric beat the consensus mark and our model estimate of $113.1 million. Interest and dividend income of $107.1 million climbed from $98 million a year ago but fell short of the consensus mark and our estimate of $122.4 million.
Adjusted EBITDA jumped to $217.5 million in the quarter under review from $122 million a year ago and surpassed our model estimate of $162.4 million. Adjusted EBITDA margin of 56.5% improved 1,270 basis points year over year.
Total operating expenses increased to $537.6 million from $471.4 million in the year-ago quarter and was higher than our estimate of $506.5 million. The year-over-year rise was due to higher net brokerage, exchange, clearance fees and payments for order flow, communication and data processing costs, employee compensation and payroll taxes, interest and dividend expenses, and transaction advisory fees and expenses.
Q2 Segmental Update
Market Making: Adjusted net trading income was $285.6 million in the second quarter, up 47.8% year over year, and surpassed our estimate of $230.3 million. The segment’s revenues rose 40.6% year over year to $569.8 million, higher than the Zacks Consensus Estimate and our estimate of $476.8 million.
Execution Services: The unit recorded an adjusted net trading income of $99.5 million in the quarter under review, which grew 16.4% year over year. Also, the metric beat our estimate of $90.8 million. Total revenues of $127.1 million grew 16.4% year over year and surpassed the consensus mark and our estimate of $113.9 million.
Financial Update (as of Jun 30, 2024)
Virtu Financial exited the second quarter with cash and cash equivalents of $684.8 million, which plunged from the 2023-end level of $820.4 million. Total assets of $13.9 billion decreased from the $14.5 billion figure at 2023 end.
Long-term borrowings, net, amounted to $1.74 billion, up marginally from the 2023-end level of $1.73 billion. Short-term borrowings totaled $73.7 million.
Total equity of $1.43 billion inched up from the $1.41 billion level at 2023 end.
Share Repurchase and Dividend Update
As part of the Share Repurchase Program, Virtu Financial bought back 1.4 million shares worth $31 million in the second quarter of 2024. It had a leftover capacity of $538.6 million under its buyback authorization for future purchases.
VIRT announced a cash dividend of 24 cents per share. The dividend will be paid out on Sep 15, 2024, to shareholders of record as of Sep 1, 2024.
The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $17.33 per share, which indicates 35% year-over-year growth. It witnessed two upward estimate revisions in the past 30 days against no downward movement. The consensus mark for JXN’s current year revenues suggests a 116.7% surge from a year ago.
The Zacks Consensus Estimate for WisdomTree’s 2024 earnings indicates 51.4% year-over-year growth. During the past two months, WT has witnessed one upward estimate revision against none in the opposite direction. It met earnings estimates thrice in the past four quarters and beat once, with an average surprise of 2.3%.
The Zacks Consensus Estimate for HIVE Digital’s current-year earnings suggests a 29.1% year-over-year improvement. During the past month, HIVE has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for current-year revenues is pegged at $111.8 million.
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Virtu Financial (VIRT) Q2 Earnings Beat on Strong Market Making
Virtu Financial, Inc. (VIRT - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 83 cents, which outpaced the Zacks Consensus Estimate by 33.9%. The bottom line jumped from 37 cents per share a year ago.
Adjusted net trading income improved more than 36% year over year to $385.1 million in the quarter under review. It beat the consensus estimate by 15.8%.
The strong second-quarter results benefited on the back of strong revenue contribution from the Market Making segment and higher revenues from commissions. However, the upside was partly offset by an elevated overall expense level.
Virtu Financial, Inc. Price, Consensus and EPS Surprise
Virtu Financial, Inc. price-consensus-eps-surprise-chart | Virtu Financial, Inc. Quote
Q2 Performance Details
Revenues from commissions, net and technology services amounted to $126.1 million, which rose from $109.5 million a year ago. The metric beat the consensus mark and our model estimate of $113.1 million. Interest and dividend income of $107.1 million climbed from $98 million a year ago but fell short of the consensus mark and our estimate of $122.4 million.
Adjusted EBITDA jumped to $217.5 million in the quarter under review from $122 million a year ago and surpassed our model estimate of $162.4 million. Adjusted EBITDA margin of 56.5% improved 1,270 basis points year over year.
Total operating expenses increased to $537.6 million from $471.4 million in the year-ago quarter and was higher than our estimate of $506.5 million. The year-over-year rise was due to higher net brokerage, exchange, clearance fees and payments for order flow, communication and data processing costs, employee compensation and payroll taxes, interest and dividend expenses, and transaction advisory fees and expenses.
Q2 Segmental Update
Market Making: Adjusted net trading income was $285.6 million in the second quarter, up 47.8% year over year, and surpassed our estimate of $230.3 million. The segment’s revenues rose 40.6% year over year to $569.8 million, higher than the Zacks Consensus Estimate and our estimate of $476.8 million.
Execution Services: The unit recorded an adjusted net trading income of $99.5 million in the quarter under review, which grew 16.4% year over year. Also, the metric beat our estimate of $90.8 million. Total revenues of $127.1 million grew 16.4% year over year and surpassed the consensus mark and our estimate of $113.9 million.
Financial Update (as of Jun 30, 2024)
Virtu Financial exited the second quarter with cash and cash equivalents of $684.8 million, which plunged from the 2023-end level of $820.4 million. Total assets of $13.9 billion decreased from the $14.5 billion figure at 2023 end.
Long-term borrowings, net, amounted to $1.74 billion, up marginally from the 2023-end level of $1.73 billion. Short-term borrowings totaled $73.7 million.
Total equity of $1.43 billion inched up from the $1.41 billion level at 2023 end.
Share Repurchase and Dividend Update
As part of the Share Repurchase Program, Virtu Financial bought back 1.4 million shares worth $31 million in the second quarter of 2024. It had a leftover capacity of $538.6 million under its buyback authorization for future purchases.
VIRT announced a cash dividend of 24 cents per share. The dividend will be paid out on Sep 15, 2024, to shareholders of record as of Sep 1, 2024.
Zacks Rank & Other Key Picks
VIRT currently has a Zacks Rank #2 (Buy).
Investors interested in the broader Finance space may look at some other top-ranked players like Jackson Financial Inc. (JXN - Free Report) , WisdomTree, Inc. (WT - Free Report) and HIVE Digital Technologies Ltd. (HIVE - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $17.33 per share, which indicates 35% year-over-year growth. It witnessed two upward estimate revisions in the past 30 days against no downward movement. The consensus mark for JXN’s current year revenues suggests a 116.7% surge from a year ago.
The Zacks Consensus Estimate for WisdomTree’s 2024 earnings indicates 51.4% year-over-year growth. During the past two months, WT has witnessed one upward estimate revision against none in the opposite direction. It met earnings estimates thrice in the past four quarters and beat once, with an average surprise of 2.3%.
The Zacks Consensus Estimate for HIVE Digital’s current-year earnings suggests a 29.1% year-over-year improvement. During the past month, HIVE has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for current-year revenues is pegged at $111.8 million.